Reducing out-of-pocket prescription medication costs is of extreme importance for patients in our medical system in Scottsdale and in Arizona. Tackling skyrocketing costs of prescription drugs is difficult, and I applaud the efforts of Congress to find a federal solution. I served many years in Scottsdale on the City Council, so I well understand studying and resolving complex issues that impact everyone’s personal and family budget.
Yet, I’m troubled by policies that would reduce our residents’ access to innovative new treatments. Specifically , a policy that would impose international reference pricing on lifesaving American pharmaceuticals – such as House Speaker Nancy Pelosi’s H.R. 3 – is not the solution that Arizona’s or Scottsdale’s patients need. Congress is trading short term gain for long term pain and suffering of patients with catastrophic illnesses.
The pandemic highlighted the importance of a robust innovation ecosystem that enables U.S. biopharmaceutical companies to swiftly invest in the development of groundbreaking treatments. As a result of the tireless work of scientists and researchers across the U.S., more than half of American adults are now vaccinated against COVID-19. But we would not be in this better position today – and we would be far less prepared to address the next major health challenge – if we were to adopt foreign price controls from countries that don’t value innovation.
As an example, prior to implementing price controls, European-based companies invested 24 percent more on biopharmaceutical research and development than U.S.-based companies. By 2015 and after price controls, European companies lagged their American counterparts by 40 percent. If OECD countries were to eliminate price controls, it’s estimated that 13 new drugs per year would be available to patients. We cannot afford to implement the same detrimental policies that would choke off America’s innovative medicine pipeline.
An overwhelming majority of biopharmaceutical innovators in the U.S. are small and emerging companies, and they are responsible for approximately 70 percent of all clinical trials. Scottsdale city officials are currently encouraging these same types of innovators to relocate within the city’s Cure Corridor.
It’s important to understand that venture capital funding allows these companies to invest in the development of cures for some of the most difficult-to-treat conditions like cancer or Alzheimer’s, even though success is not guaranteed. But H.R. 3 would dramatically reduce outside investment in these smaller firms, devastating the segment of the biopharmaceutical industry most responsible for developing new treatments.
The Congressional Budget Office’s analysis of H.R. 3 found that the policy would prevent between eight and 15 drugs from coming to market in the coming years. Other analyses have shown that dozens of cures and medicines would never be developed. Many Arizonans live with the hope that one day there will be a cure for their illnesses – the loss of even one treatment’s development would be too many.
I urge our congressional delegation to reject price cap policies that claim to reinvest in innovation and instead would jeopardize innovation and continued access to the newest and best treatments for Arizona patients. There are better methods to reduce drug costs for all of us, such as addressing problematic insurance incentives that result in high out-of-pocket costs.